#1REFINING NZ 2021 FINANCIAL RESULTS BRIEFING REFINING NZ 2021 ANNUAL RESULTS PRESENTATION#2• • • • • • • IMPORTANT INFORMATION This presentation contains forward looking statements concerning the financial condition, results and operations of The New Zealand Refining Company Limited (hereafter referred to as "Refining NZ"). Forward looking statements are subject to the risks and uncertainties associated with the refining environment, including price and foreign currency fluctuations, regulatory changes, environmental factors, production results, demand for Refining NZ's products or services and other conditions. Forward looking statements are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward looking statements include among other things, statements concerning the potential exposure of Refining NZ to market risk and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. Forward looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook", "plan", "probably", "project”, “risks”, “seek”, "should", "target", "will" and similar terms and phrases. Readers should not place undue reliance on forward looking statements. Forward looking statements should be read in conjunction with Refining NZ's financial statements released with this presentation. This presentation is for information purposes only and does not constitute legal, financial, tax, financial product advice or investment advice or a recommendation to acquire Refining NZ's securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and consult an NZX Firm or solicitor, accountant or other professional adviser if necessary. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement. Refining NZ does not guarantee future performance and past performance information is for illustrative purposes only. To the maximum extent permitted by law, the directors of Refining NZ, Refining NZ and any of its related bodies corporate and affiliates, and their officers, partners, employees, agents, associates and advisers do not make any representation or warranty, express or implied, as to accuracy, reliability or completeness of the information in this presentation, or likelihood of fulfilment of any forward-looking statement or any event or results expressed or implied in any forward-looking statement, and disclaim all responsibility and liability for these forward-looking statements (including, without limitation, liability for negligence). Except as required by law or regulation (including the NZX Listing Rules), Refining NZ undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise. Forward looking figures in this presentation are unaudited and may include non-GAAP financial measures and information. Not all of the financial information (including any non-GAAP information) will have been prepared in accordance with, nor is it intended to comply with: (i) the financial or other reporting requirements of any regulatory body; or (ii) the accounting principles generally accepted in New Zealand or any other jurisdiction with IFRS. Some figures may be rounded, and so actual calculation of the figures may differ from the figures in this presentation. Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. Non-GAAP financial information in this presentation is not audited or reviewed. • Each forward-looking statement speaks only as of the date of this announcement, 23 February 2022. REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 2#3KEY MESSAGES Another year of excellent personal safety and operational performance Strategic Review concluded, delivering long-term plan to unlock infrastructure value Transition to a fuels import terminal is imminent; conversion cost estimates reconfirmed A fundamental reset of asset base to provide earnings stability and a focus on dividends Private storage agreements show positive early traction with a focused growth strategy REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 3#4FY21 PERFORMANCE & FINANCIALS TRANSITION TO CHANNEL INFRASTRUCTURE FY22 LOOK FORWARD#5REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 2021 PERFORMANCE HIGHLIGHTS All 2021 key priorities achieved Maintained excellent safety and operational performance through the Strategic Review and ongoing COVID-19 impacts Safe, reliable and compliant operations throughout 2021 No recordable personal safety incidents in over 2 years Turnaround 2021 executed safely, on time and within budget Included first statutory inspection of the CCR Maintain cash break-even operations at the Fee Floor Cash neutral at the fee floor, including turnaround and Strategic Review/conversion costs Conclude import terminal negotiations with customers Progress required shareholder and lender approvals and detailed planning Terminal Services Agreements signed with bp, Mobil and Z Additional private storage capacity contracted 99% of shareholders voted in support of conversion Lender consent and conversion funding secured Final investment decision taken 5#6SAFE OPERATIONS TOTAL RECORDABLE CASES [1] Number 10 8 6 4 2 0 2018 Record personal safety performance Other TRC (medical treatment, restricted work cases) • ■Lost time injuries Excellent personal safety performance continues with no recordable injuries in over two years 2019 2020 2021 PROCESS SAFETY INCIDENT [1] Number 6 4 2 • Tier Two Tier One • 0 2018 2019 2020 2021 1. For a full definition please refer to Glossary on slide 25 REFINING NZ 2021 ANNUAL RESULTS PRESENTATION Two Tier 1 process safety events in 1H21 were responded to quickly, with no significant damage to plant and actions taken to strengthen existing controls Independent assessment confirmed low risk of harm to the environment from releases of fire-fighting foam in 1H21 during fire training exercises Marsden Point site resource consent, covering refinery and import terminal operations, renewed for 35-years CO 6#7096 罟 50% THROUGHPUT FY20 FY21 Change Refinery Throughput Mbbl 29.9 29.2 0.7▼ 2.3% RAP Throughput Mbbl 14.7 13.4 Operational availability % 98.2 95.8 1.3▼ 8.8% 2.4▼ 2.4% RAP DELIVERIES BY MONTH, JAN-20 TO DEC-21 % of 2019 average 150% 100% Jan-20 Feb-20 Mar-20 Diesel Apr-20 May-20 Jun-20 Jul-20 Jet Aug-20 Sep-20 CZ-10 Petrol Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Lockdown periods 12- Aug-21 Sep-21 TZ-PO Nov-21 Dec-21 COVID restrictions continued to negatively impact throughput REFINING NZ 2021 ANNUAL RESULTS PRESENTATION • Simplified refinery model implemented from January 2021, with refinery capacity reduced by circa 18% Reduced capacity and product exports kept inventory balanced through COVID lockdowns no temporary shutdowns were required as occurred in 2020 Petrol and diesel demand has been strong outside of lockdown periods, while jet demand remained low Operational availability impacted by the four-week maintenance Turnaround, successfully completed 1H21 7#80 2 REFINING MARGINS 6 US$/BARREL 10 8 -2 ■Freight 4 2015 2016 Second full year of operations at the Fee Floor FY20 FY21 Change US$/BARREL REFINING NZ MARGIN Singapore Complex Margin (SCM)1 (1.65) (1.20) 0.45 Freight 1.55 1.80 0.25 Fee floor 4.86 equivalent SINGAPORE COMPLEX MARGIN 3.73 Product quality 0.69 0.75 0.06 Plant availability (0.16) (0.19) (0.03) Crude cost and yield 1.20 2.56 1.36 (1.20) Refining NZ uplift 3.28 4.93 1.65 Product Quality Plant Availability Crude Cost & Yield RNZ GRM 1.63 3.73 2.10 2017 2018 2019 2020 2021 • Refining margins improved from 2020 levels, but remained below Fee Floor . Stronger Refining NZ uplift due to the lower price for crudes processed, relative to Dubai • Fee Floor contributions of c. $33 million (FY20: c.$90 million) 1. The Singapore Complex Margin is calculated using Platts Dubai crude and Singapore product prices, VLCC freight to Singapore, and the International Energy Agency's Dubai complex refinery yields adjusted for fuel & loss. 8 REFINING NZ 2021 ANNUAL RESULTS PRESENTATION#92021 FINANCIAL SNAPSHOT Cash break even at the Fee Floor FY20 FY21 Change Revenue - Refinery1 NZ$M 189.9 186.0 3.9▼ 2% Revenue - Infrastructure1 NZ$M 41.0 42.5 1.5A 4% EBITDA NZ$M 50.4 72.8 22.4A 44% Capital Expenditure² NZ$M 33.4 34.0 nm Free cash flow³ NZ$M 11.0 3.2 7.8▼ 71% Net Profit/(Loss) after tax NZ$M (198.3) (552.6) (354.3) ▼ nm Net Debt4 NZ$M 231.3 183.6 47.7 ▼ 21% 2. 123 For further information, please refer to our FY21 Financial Statements, available at http://www.refiningnz.com/investor-centre.aspx Payments for property, plant and equipment (cashflow basis) For a full definition please refer to the Glossary on slide 25 REFINING NZ 2021 ANNUAL RESULTS PRESENTATION Lower Refinery revenue reflects lower gas usage, no wage subsidy in 2021 and lower carbon unit sales Improved EBITDA reflects the benefits of the refinery simplification and settlement gains from "cash out" of legacy balance sheet items (refer next page) Net loss after tax includes impairment of refining assets and recognition of conversion related provisions Net debt c.$47 million lower than FY20, primarily reflects the proceeds of the equity raise to fund Private Storage 9#102021 v 2020 EBITDA COMPARISON 44% increase in EBITDA, at Fee Floor revenue NZ$M 80 70 60 50 40 40 30 50.4 220 20 10 (1.1) Net Fee Floor Impact 1.5 Infrastructure Income EBITDA FY 2020 12 1. 2. (9.5) Other Income¹ 22.8 16.5 Net Cost Reduction² (7.8) Strategic Review & Conversion Costs Non Cash Release Non-cash release includes "cash out" of legacy balance sheet items and gain on electricity hedges Operating costs were c.15% lower than FY20 and c.30% lower than FY19 as a result of the refinery simplification REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 72.8 Other income in FY20 included COVID wages subsidy (FY21: nil) and gain on sale of carbon units Excluding natural gas and other pass-through costs and Strategic Review and conversion costs EBITDA FY 2021 10 10#11CASH FLOW NZ$M • • 300 Operated cash neutral, with equity raise reducing net debt REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 250 (32) 32 (47) 200 Operating Cashflow' Capital Expenditure1/2 Equity Raise 150 258 241 231 100 50 50 Net Debt FY 18 Net Debt FY19 Net Debt FY20 184 Net Debt FY21 The Company successfully operated cash neutral at the Fee Floor, including turnaround and Strategic Review/conversion costs Capital expenditure of $32m included $13m of maintenance turnaround costs associated with the main crude distiller and the first statutory inspection of the petrol manufacturing unit (CCR) • Lower net debt includes proceeds from the successful equity raise to fund private storage 1 Includes costs of the Strategic Review and Terminal Conversion costs less lease payments 2 Capital expenditure is net of proceeds from sale of intangibles 11#12BALANCE SHEET Summarised Balance Sheet [1] FY 20 FY 21 Cash NZ$M 43 16 Receivables and inventory NZ$M 175 148 Current Assets NZ$M 218 164 Property, Plant and Equipment NZ$M 882 869 Intangibles &other non-currents NZ$M 33 42 Deferred Tax Assets NZ$M 35 82 Total Assets NZ$M 1,168 1,157 Trade and Other Payables NZ$M 164 156 Employee Benefits NZ$M 11 10 Provisions NZ$M 87 Current Liabilities NZ$M 175 253 Borrowings NZ$M 275 200 Employee Benefits & other NZ$M 49 10 • Provisions NZ$M 8 98 Deferred Tax Liabilities NZ$M 97 101 Total Liabilities NZ$M 604 662 • Net assets NZ$M 564 495 Net assets as at 31 December 2021, equivalent to $1.33 per share Impacts of conversion on FY21 Balance Sheet Overview of Accounting Adjustments for Conversion Impairment of refining assets • REFINING NZ 2021 ANNUAL RESULTS PRESENTATION Non-cash impairment of refinery assets of $567 million Net residual value of $34 million for scrap & other assets with residual value Provisions for Conversion Costs • Recognition of $176 million of conversion provisions including workforce transition costs, shutdown and decommissioning costs and future demolition of refinery Reduction in employee benefits reflects pension and medical plan cash-out offers, payment of simplification redundancies and conversion adjustments Revaluation of Import Terminal Assets Import terminal assets have been revalued to "fair value" based on independent valuation resulting in net carrying value for PPE of $869 million The "uplift" on revaluation of import terminal assets of $423 million is recognised in equity revaluation reserve Recognition of tax losses following refinery closure (with transfer from PPE to tax losses) - in addition to existing tax losses of $70 million Subject to shareholder continuity or (if breached) business continuity test Tax losses of $350-400 million expected to be recognised 1. The above summarised balance sheet, should be read in conjunction with the FY21 Financial Statements, available at http://www.refiningnz.com/investor-centre.aspx 12#13FY21 PERFORMANCE & FINANCIALS TRANSITION TO CHANNEL INFRASTRUCTURE FY22 LOOK FORWARD#14KEY TERMINAL HIGHLIGHTS Critical infrastructure delivering more stable earnings through long term customer agreements ✓ Ownership of critical and highly efficient infrastructure ✓ Long-term customer contracts ✓ Projected stable earnings, cash flow and dividends Supporting decarbonisation of New Zealand's economy Focused growth strategy 1. For a full definition of terms -TLF, RAP and ITS - please refer to the Glossary on slide 25 Overview of ITS and Flow of Imports PRODUCTS IMPORTED BY CUSTOMERS REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 40% OF NZ FUEL STORAGE LOCATED AT MARSDEN POINT TLF PETROLAND DIESEL SUPPLY INTO NORTHLAND RAP JET, PETROL AND DIESEL SUPPLY INTO AUCKLAND#15Terminal Services Agreements • • • • . • TSA fees to commence from 1 April 2022 Initial term of 10 years plus two rights of renewal for a further five years each, at customers discretion Combination of fixed and throughput-based fees intended to incentivise utilisation of infrastructure Initial minimum take or pay commitments to support debt funding of initial conversion costs and allow time for recovery in jet fuel demand 'Core' ITS fees are expected to average c.$95 million per annum (real) across the initial 10-year term Additional private storage fees (refer next slide) are expected to average c.$9 million per annum (real) across the same period Annual PPI based indexation of all fees with the first adjustment in January 2023 for the period from 1 April 2022 Annualised Take-or-pay Fee Before annual price indexation adjustments, $m) 120 60 20 ' ■Fixed Fee TERMINAL ARRANGEMENTS 2022 2023 2024 ■Take-or-pay 2025 2026 ■Private Storage Note: Private Storage Agreements have an equivalent renewal right on the basis that the TSA's are renewed 2027 2028 40 $45m Fixed $40m Fixed Fee Fee 100 $100m ToP $90m ToP 80 Annualised Contracted Fees 2029 2030 2031 $35m Fixed Fee $65m ToP Private Storage 2032 2033 2034 2035 2036 2037 2038 2039 End of Second right TSA of renewal First right of renewal 'Core' revenue contracted through bi-lateral Terminal Services Agreements REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 2040 2041 2042 15#16PRIVATE STORAGE Additional private storage capacity has now been contracted Contracted private storage capacity totals c. 100 ML - in addition to c.180 ML of shared terminal capacity • • • • • Private storage provides customers with freight cost optimisation benefits as a result of increased product supply scale and flexibility In November 2021, contracted private storage required an initial capital commitment of c.$30 million for incremental revenue of c.$50 million (real) over a 10-year term Additional capacity commitments have now been confirmed Total private storage capacity now contracted: • Estimated capital cost of c.$45-50 million - fully funded by December 2021 equity raise of $47 million Incremental revenue of c.$90 million (real) over a 10-year initial term Fixed rental agreements subject to annual PPI-based indexation Capacity will be progressively commissioned from commencement of terminal operations through to mid-2023 Government announcement in January proposing inventory stockholding fuel security measures • Public consultation on the proposed Policy is currently underway Initial opportunity assessment based on draft policy indicates potential for an additional 50-70 ML of private storage at Marsden Point REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 16#17CONVERSION PROGRAM Transition to Channel Infrastructure from 1 April 2022 REFINING NZ 2021 ANNUAL RESULTS PRESENTATION Feb 22 Mar 22 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 Oct 22 Nov 22 Dec 22 2023 FY21 results Revaluation of terminal assets 1 April: Terminal 10 May: AGM 24 August: Last crude shipment Refinery shutdown Services Agreement fees commence Channel Infrastructure rebranding (NZR: CHI) First Sustainability Report released Refinery decommissioning commences • HY FY22 results Refinery shutdown to commence in March and the TSA fees commence from 1 April. • COVID risks to project costs and delivery are being actively managed and at present remain within project budgeted contingencies • Quarterly updates to be provided through the year as conversion project activity is undertaken Quarterly Conversion Project Updates Continuous operation of the Marsden Point storage facilities and RAP Target recommencement of dividends All private storage commissioned Refinery decommissioning completed 17#18CONVERSION COSTS Conversion spend phased over a number of years REFINING NZ 2021 ANNUAL RESULTS PRESENTATION Terminal Conversion: $200-220 million Private Storage: $45-50 million Future spend Demolition: $50 million Conversion cost operating and capital expenditure in FY21 of $15 million 200 2021 Spend 175 150 125 100 75 50 25 # FY21 FY22 FY23 - FY27 FY33+ $176 million of conversion and demolition costs provided for in FY21 financial statements. Balance of conversion and private storage costs will be capitalized as incurred Terminal Conversion: $200-220 million ■ Terminal upgrade costs (CAPEX) ■ Shutdown and decommissioning costs ■ Workforce, contract termination and other transition costs 18#19CONVERSION FUNDING 1. 2. $m Debt Maturity Profile 175 150 125 100 75 75 50 95 95 50 25 25 55 0 50 15 25 45 Bank consents and conversion funding is in place 50 нн ■Undrawn bank facilities 0-1 year 1-2 years 2-3 years 3-4 years Subordinated notes ■Drawn bank facilities REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 75 2034 • • • . In 2021, the Company received conversion consent from its bank lenders, extended certain facilities and raised new facilities to fund conversion As at 31 December 2021, the Company had committed facilities totalling $410 million, with $155m of liquidity headroom, excluding debt maturing in the next 12 months An average interest rate of 4.6% in FY21; $150 million of the Company's drawn debt is fixed, with additional forward start swaps in place Refinancing strategy to be executed in 2022 to diversify funding, extend debt tenor and optimise debt costs, with the improvement in the Company's credit profile Expect lower peak leverage (Net Debt/EBITDA) as a result of equity raising. Lender consents permit recommencement of dividends after the end of 2022 and deleveraging to below 4.5 times Net Debt/EBITDA The Company reconfirms its expectation that dividends should recommence within 1 to 2 years of the commencement of terminal services. Proposed dividend policy pay-out ratio of 60-70% of Free Cash Flow² The Board reserves the right to adjust the payout ratio or expected timing for the recommencement of dividends should the timing, costs or revenue associated with the conversion (including new services such as Private Storage Services) or the import terminal business change. The dividend policy will be subject to the Board's due consideration of the Company's medium term asset investment programme; a sustainable financial structure for Channel Infrastructure, recognising the targeted investment grade rating (within five years of the Services Effective Date); and the risks from short and medium term economic and market conditions and estimated financial performance. Adjusted net cash generated from operations less maintenance capex. 19#20FY21 PERFORMANCE & FINANCIALS TRANSITION TO CHANNEL INFRASTRUCTURE FY22 LOOK FORWARD#212022 PRIORITIES Safe, reliable and compliant refinery and terminal operations On time and on budget delivery of terminal conversion project Retain and build organisational capability through the transition Actively manage the transition to CHI with investors and debt providers Progress opportunities for growth, including repurposing of Marsden Point REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 21#22FOCUSED GROWTH STRATEGY A disciplined approach to near-term prioritisation while maintaining 2021 ANNUAL RESULTS longer-term options REFINING NZ PRESENTATION An initial assessment of Marsden Point repurposing options has been completed ahead of confirming approach to refinery shutdown Horizon 1 (Existing technology/market) Horizon 2 (Investment/market development required) Horizon 3 (New market/technology) FY22 priorities: Additional private storage - ITS-related and other products Government security of supply measures - Initial opportunity estimate of 50-70 ML Electricity supply - Exploring full range of options for lowest cost supply, including Maranga Ra project Proactive preparation: Bio-fuels terminal (imports) Biofuels mandate due to commence 2023 - further work needed to determine infrastructure requirements Sustainable Aviation Fuels (SAF) Primary solution for decarbonising long-haul flights Maintaining close contact with potential partners Maintain options: Green hydrogen - Marsden Point site attractive given existing industrial-scale infrastructure (e.g. jetty access, electricity, consents, etc.) MOU with Fortescue Future Industries (FFI) to study feasibility of industrial scale operations underway 22 22#232022 OUTLOOK 1 2 3 4 Q1 Processing Fee revenue currently expected to exceed the Fee Floor by c.$5 to $10 million¹ Import Terminal fees to commence from 1 April, with Take or Pay commitments of c.$75 million in FY22 FY22 Operating costs (excluding conversion costs) expected to be c.$70 million Borrowings will increase over the year and are expected to average around $250 million in FY22 1. 2. 5 Financing costs expected to be c. $14 million² Subject to refinery production levels, export volumes, margins and FX. Fee Floor in 2022 amounts to $147 million Based on existing facilities, BKBM and interest rate hedging in place REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 23#24Questions?#25GLOSSARY • LTI - Lost time injury TRC-Total recordable case Tier 1 Process Safety Event (API 754) - A tier 1 Process Safety Event (PSE) is an unplanned or uncontrolled release of any material, including non-toxic and non-flammable, from a process which results in one or more of the following: A LTI and/or fatality; A fire or explosion resulting in greater than or equal to $25,000 of direct cost to the company; A release of material greater than the threshold quantities given in Table 1 of API 754 in any one-hour period; A officially declared community evacuation or community shelter-in-place Tier 2 Process Safety Event (API 754) - A tier 2 Process Safety Event (PSE) is an unplanned or uncontrolled release of any material, including non-toxic and non-flammable, from a process which results in one or more of the following: A recordable injury; A fire or explosion resulting in greater than or equal to $2,500 of direct cost to the company; A release of material greater than the threshold quantities given in Table 2 of API 754 in any one-hour period. Net debt - Net debt comprises total borrowings less cash and cash equivalents Operating "cash neutral” – maintaining a "flat" net debt position (i.e. total lender debt, including subordinated notes, less and cash/funds held on deposit), after paying all operating, capital and funding costs out of the company's revenue receipts. This excludes Strategic Review restructuring costs. Reported EBITDA - Earnings Before Depreciation and Disposal Costs, Impairment of assets, Finance costs and Income Tax in a non-GAAP measure. Please refer to Appendix II for a reconciliation Free Cash Flow - Net cash generated from operations less investing activities RAP - Refinery to Auckland Pipeline TLF Truck Loading Facility - Services Effective Date - is the commencement date of the Import Terminal System Services under the Terminal Services Agreements (TSA's) ITS-Import terminal system REFINING NZ 2021 ANNUAL RESULTS PRESENTATION 25#26REFINING NZ 2021 FINANCIAL RESULTS BRIEFING REFINING NZ 2020 ANNUAL RESULTS PRESENTATION